California Contractors Licensing for Corporations

Like the seasons, some of the questions I get from contractors sometimes seem to fit into a pattern. For instance, as hard as I try to get the word out to contractors and attorneys regarding LLC’s, this question surfaces on a weekly basis. I also get a regular run of calls about corporate name changes and the use of a ‘DBA’. To help answer some of those questions I often refer callers to my website where they can ‘keyword’ search a topic and get answers from past columns like these…

January 06

Q. I saw two active CSLB license numbers listing what appears to be the same Corporation name. Is this legal? Can a California Corporation be assigned more than one Contractor’s License number at the same time? Does the CSLB tie the State Corporate number to the License? PS: Keep up the great columns!

A: Thank you for the compliment. I am glad you enjoy the columns.

Regarding your questions: It is perfectly legal for a corporation to have more than one license number. In fact I am aware of some companies that have four or more licenses for the same corporation. These are tied to the same corporate number and can be structured in several ways.

If a corporation wanted to be separately licensed in several different classifications, they could have a different license number for each entity. In this way the company could sign contracts under different names yet be part of the same corporation. For instance they may want to identify their plumbing operations separately from their HVAC business. It is my understanding that the CSLB will not allow a company to simultaneously have two license numbers for the same corporation with the SAME classification.

A second reason a corporation might want to have more than one license number is to retain the business names of companies they purchase. For example, an existing company purchases three businesses. They retain their existing license and apply for three new licenses each with a ‘Doing Business As’, or ‘DBA’ designation. The end result is four license numbers for four separate entities under one corporation (and one corporate number).

Finally, if a company wanted to divide themselves into divisions so each would have a separate license number, they could apply for multiple licenses in order to bid under these different names. In this case rather than a ‘DBA’, their business name would, for example, read: XYZ Construction, a division of USA Building Company, Inc.

October 02

Q: What are the first steps to obtaining a general contractor license?

A: To secure a general contractor’s license your first step should be to determine that you have 4 years full time experience in the building trades. This means having a background that includes framing, plumbing, concrete, roofing, etc. If this basic requirement is met, you’ll need to file an Application with the appropriate state-licensing agency. In California, this is the Contractors State License Board (CSLB). Someone who is familiar with your employment must certify your experience qualifications. A two-part exam will be required covering the law and building trades. After you pass these tests, a bond will be required as will a Certificate of Workers Compensation (or exemption if you have no employees). Fees to the CSLB will total $400.00.

September 2006

Q: I understand that the CSLB will not issue a contractor’s license to an LLC. In addition, I heard the CSLB won’t issue a license to a partnership (general or limited) where an LLC is a general partner. Any changes to this status? Any pending legislation?

A: There is no pending legislation that I am aware of. The CSLB still will not issue a contractor license to an LLC or a license to a partnership (general or limited) where an LLC is a general partner. It’s status quo for Limited Liability Companies.